Domain Investing is Alive and Well
“A few events over the last few months, however, provide solid evidence that the domain investment party is officially over.” – Andrew Knibbe of Flippa, December 2011, on JohnChow.com
Almost one year ago, entrepreneur and blogger John Chow posted a guest article entitled, “Why Domain Investing is Dead.” I have quite a bit of respect for John Chow, but over the last year, I think it has become quite clear that domain investing is certainly alive and arguably well.
There are probably a few hundred people who invest in domain names full time. There are most likely several thousand people who invest in domain names as a hobby, and even more people who casually buy domain names they think are cool after seeing a Go Daddy or 1&1 commercial encouraging people to register domain names matching their ideas. Hundreds of millions of dollars continue to be spent on domain names, both at the registrar level and via the aftermarket.
Like just about everything else, domain investing certainly took a financial hit during the last few years. Sedo’s most recent market reports have reflected the aftermarket slump. Thankfully, 2012 was good for me. For whatever reason, companies of varying sizes acquired high value domain names from my company, and I continued to reinvest in other domain assets.
While some areas of domain investing (like domain parking) are down from the “good old days,” market disrupters like Internet Traffic, Voodoo, and Rook Media have helped stabilize that area and there has even been some growth there in the last couple of years. I don’t do much parking, but from what I understand, PPC earnings are up from 2009-10.
Recently, companies have spent tens of millions of dollars to bid on gTLDs. The winners will most likely spend hundreds of millions of dollars marketing and operating these new TLDs. Domain investors and others will pour millions of dollars into domain registrations with the hopes of developing profitable businesses, monetizing, or re-selling these domain names. Yes, there is life in the domain investment space.
I believe making money exclusively from domain names has probably become more difficult, but I can’t really think of many areas where that has become easier over the last few years. If I first learned about domain investing today, I think I would be hard pressed to see significant opportunity if I didn’t have a huge capital reserve to make big investments, although I would probably be excited about the potential with gTLD domain names.
It’s been a year since domain investing was declared dead, but I think it’s clear that this business is alive and well.